Could Elon Musk's Political Donations And Endorsements Harm Tesla's Business In The Future?
Elon Musk‘s recent endorsement of former President Donald Trump could have significant implications for Tesla. Benzinga's Premarket Prep team discuss.
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00:00All right, Dennis. We've got about five minutes left. Do I have permission to go on a little mini
00:05DDD rant here? Oh, gosh. I'm a little bit scared, but yes.
00:10Okay. So we're talking about Trump. We're talking about clean energy. We got this news yesterday
00:16that Elon is going to be donating $45 million a month to Trump's campaign. I'm not upset about
00:26Elon doing this individually. People on both sides, you have big tech billionaires donating
00:31hundreds of millions of dollars, collectively hundreds of millions of dollars to Democratic
00:37nominees. I don't love the whole money in politics thing from either side. I'll never blame Elon
00:43individually because he's just taking advantage of a system that's been allowed to persist.
00:48It's like how a lot of people, a lot of liberals will get mad at Trump for doing some tax stuff,
00:54and it's like, okay, well, billionaires have been doing that for years and years and years,
00:57and now you're just getting mad because you don't like Trump. It's not about actually Trump doing
01:00it. It's the fact that this has been allowed to go on. There are people on both sides,
01:07conservatives and liberals, that want to repeal the Citizens United court case that allows for
01:14this crazy money in politics. I just do not understand this at all from a business perspective
01:21for Tesla, and I'll walk you through why. Is he saying he's going to use Tesla money or his
01:26own money? Because I saw the headline, but I didn't read it. It's his own money, but of course,
01:30this is coming from Tesla. People on Twitter have been saying, what if he used that money
01:36on marketing and advertising? Maybe the car sales wouldn't be declining year over year,
01:39and instead he's donating it to Trump. I don't even care about that. It's his own money. He
01:42can do what he wants, Elon. If it's his own money, I'm not as big of an issue. If he's taking Tesla-
01:48It is his own money. He's not taking Tesla money and doing it for Trump's campaign.
01:52I'm just saying from the long term, I've been talking about how I love Tesla's energy storage
01:57side of the business. I'm bullish Tesla because of that. Which states do you think are more likely
02:05to sign contracts for energy storage thing? Blue states or red states? It's blue states.
02:10If you start pissing off, if he gets so buddy-buddy with Trump,
02:14you think Gavin Newsom or someone like that might hold a grudge and not go with Tesla for
02:19something like this? Do you think, by the way, when robo taxis come out, if states are mad at Elon
02:26because he's going the other direction, if they might not pass regulations as quick enough to
02:31legalize the self-driving Teslas or whatever it is? Then the red states, you look at JD Vance or
02:37some of the politicians down in Texas, they're taking money from the oil and gas industry.
02:44They're not going to be that friendly to Tesla. Maybe Elon has talked with Trump behind the scenes
02:49about what he's going to get by donating all this money and getting so buddy-buddy. It just does not
02:55make sense to me from a business decision. I don't think it's going to matter in the short term,
02:59but I think five years down the road, we could be looking back on it and saying,
03:03well, he made a business- He burned his bridges.
03:07He's burned his bridges to try to build a bridge to an area where he may not get the approvals
03:14anyways, like are the Republican states going to give him approval anyways? Then he's burning his
03:20own blue bridges to try to pick up the red bridges. I see where you're going with this,
03:25and it's a good argument. I think he's got the blue bridges anyways, and he's just trying to
03:30pick up the red bridges too. He's playing a game of Monopoly. He's trying to own all the property,
03:34so he wants to get it all. I don't think it hurts if he really believes that Trump is going to win,
03:41which it looks like at this point in time. Obviously, a lot of things can change five
03:45months from now, but at this point in time, it does look like Trump's going to win.
03:48I don't think it hurts to be on the good side of the president in the next administration.
03:52That's true. By the way, I found that there was this old tweet from- and again,
03:57not to get ... I don't know if this is too political. I just thought this was funny.
04:00Someone posted this last night on Twitter because I forgot that this happened. This was from 2022.
04:06Trump tweeting, when Elon Musk came to the White House asking me for help on all his many
04:11subsidized projects, whether it's electric cars that don't drive long enough, driverless cars
04:15that crash, or rocket ships to nowhere, without which subsidies he'd be worthless, which that
04:21part's true. Tesla would have gone bankrupt without California subsidies, and that's been
04:24written about extensively, and telling me how much he was a big Trump fan and Republican.
04:28I could have said, drop to your knees and beg, and he would have done it.
04:32And now Elon's turning around and donating $45 million a month.
04:35Oh, yeah. Times have changed.
04:37Times have changed. Now they're friends, and now they're getting along. I think you make a good
04:41point, Ted, is that maybe he's just saying, look, Trump's going to win anyway.
04:46I need Trump on my side, is what he's saying.
04:48You need him on your side. Yeah, that's a good point.
04:50He needs all these approvals. Again, the biggest hurdle, Gene Munster said it,
04:55we've said it on this show, the biggest hurdle for robo-taxis is going to be regulatory approvals.
05:00It's the biggest hurdle. They got it in California, but one state doesn't make a
05:05business here, so it's going to be a long road to get regulatory approvals in each state.
05:10And that's going to be the biggest issue, because again, let's just say, oh, I got a
05:15self-driving car, I'm going to take a trip from East Coast to West Coast.
05:19Well, you can't drive through this state because you're going to get a ticket for that full
05:23self-drive, or you can't drive through this one. You kind of need all the states, you kind of need
05:27everybody on board. It's a tricky thing. And robo-taxis are a little ways away here, folks,
05:31but obviously they're going to be able to be operational in a few states sooner than later,
05:36or obviously already operating under Waymo in California. I think cozying up and a little bit
05:45of love to Trump, that goes a long way. But I still think if you look at a state like Texas
05:50and that collectively the legislators in Texas are taking in hundreds of millions of dollars from
05:56the oil and gas company, a lot of them are headquartered down there in Houston. Are those
06:01Texas guys going to be like, oh, well, Elon is with Trump, so let's give Tesla this favorable
06:06policy, or will they give it still to the oil and gas companies? Which that's, again, my bigger
06:10issue. And it's on the left and the right that you have these big tech billionaires that donate
06:16to the politicians, and then they get to make the policies, or they get favorable policies for the
06:20hundreds of millions of dollars they're donating. And that's why really over the last 20 years,
06:24you've seen companies basically be in charge of policies. And a lot of people in cities,
06:30in rural areas, right, left, white, black, have felt left behind in America because it hasn't
06:36really operated as a democracy per se and more of like, oh, which company can buy the politician
06:42and donate the most money and then get their favorable policies? And I'm not a fan of that,
06:46whether it be, again, it happens- What goes on though?
06:49Yeah. Stock market,
06:50come on. The stock market's built on this. Let's go ahead and get, speaking of the stock market.